Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B: Estimated Data Manufacturing overhead Direct labor-hours Machine-hours Job A Direct labor-hours Machine-hours Job B Direct labor-hours Machine-hours Machining $ 1,008,000 Machining 11 Machining Assembly 4 3 12 1. Manufacturing overhead applied Job A 1. Manufacturing overhead applied Job B 2. Manufacturing overhead applied Job A 2. Manufacturing overhead applied Job B 12,000 84,000 Annembly 10 2 Total 15 Assembly $144,000 84,000 7,000 Total: 15 13. Total $ 1,152,000 96,000 91,000 Required: 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? 2. Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-Hours. How much manufacturing overhead cost would be applied to Job A? Job B? (For Requirement 2, round your intermediate calculations and final answers to 2 decimal places.)
Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B: Estimated Data Manufacturing overhead Direct labor-hours Machine-hours Job A Direct labor-hours Machine-hours Job B Direct labor-hours Machine-hours Machining $ 1,008,000 Machining 11 Machining Assembly 4 3 12 1. Manufacturing overhead applied Job A 1. Manufacturing overhead applied Job B 2. Manufacturing overhead applied Job A 2. Manufacturing overhead applied Job B 12,000 84,000 Annembly 10 2 Total 15 Assembly $144,000 84,000 7,000 Total: 15 13. Total $ 1,152,000 96,000 91,000 Required: 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? 2. Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-Hours. How much manufacturing overhead cost would be applied to Job A? Job B? (For Requirement 2, round your intermediate calculations and final answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing
overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information
with respect to Jobs A and B.
Estimated Data
Manufacturing overhead
Direct labor-hours
Machine-hours
Job A
Direct labor-hours
Machine-hours
Job B
Direct labor-hours
Machine-hours
Machining
$ 1,008,000
Machining
5
11
Machining Assembly
4
12
1. Manufacturing overhead applied Job A
1. Manufacturing overhead applied Job B
2. Manufacturing overhead applied Job A
2 Manufacturing overhead applied Job B
12,000.
84,000.
Assembly
10
2
Total
9
15
Assembly
$ 144,000
84,000
7,000
Total
15
13
Total
$ 1,152,000
96,000
91,000
Required:
1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much
manufacturing overhead cost would be applied to Job A? Job B?
2. Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on
machine-hours and the Assembly Department is allocated based on direct labor-Hours. How much manufacturing overhead cost would
be applied to Job A? Job B? (For Requirement 2, round your intermediate calculations and final answers to 2 decimal places.)
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